2/01/2008

A couple of people reading the site asked me to reprint this exchange from the comments section on John McNamara's letter. I've cleaned it up a little bit, added some things I forgot, and gotten more exact #'s from the MBA, but here's the exchange.

(Oh, and bear in mind, I'm not on the NegComm, not on the Board, not a lawyer, etc. So my response is a sketch at BEST, not a full-blown super-accurate presentation of everything to do with minimus and residuals and so on).

Commenter rHob posted this question:

I just want to ask a serious question and I mean that, and I want the writers out there to seriously answer me.

So if I understand it correctly, you currently receive $40,000 for the first airing of a broadcast episode and then it's either another $40,000 or it's $20,000 for the rerun and then progressively it goes down from there.

So what you really want is the same thing for straight to web episodes (webisodes)??? So this is going to cost the studios $40,000 per writer per episode for the net. Let's say that there are 5 writers, that's a cost of $100,000 right up front that the studios will have to pay just to get something started to go onto the web. Now, as I have been reading, you want to venture out on your own and stream your own shows, skipping the studios. So now you are going to compete with the studios directly but you don't have that initial $100,000 overhead. Is that fair? If this is the case, then you should have a Non-Competition clause in your contract, otherwise, how are the studios supposed to compete? The very studios that have made sure to give you employment for the past 100 years. Riddle me that Batman!

rHob

And this was my response:

Just a quick correction/explanation, I'm sure other people will do it better than me, but here goes:

For an hour of network primetime television, you get paid around $30K , not $40K, to write (which involves lots of outlines, drafts, read-throughs, many, many revisions, and so on until you finally shoot). For anything that's not primetime network -- like basic cable -- payment ranges between about $11K at the low end and $20K at the high end.

You DON'T get paid any further when your episode airs. You already got paid to write it.

You then get paid $20K for the first hour-long network primetime rerun. In cable, you get paid a lot less (I'm not sure of the exact number, it's in the neighborhood of $3400 for the first rerun, and then the amount goes down proportionally with each airing to a floor of about $300.) Also, half-hour cable rerun $'s are lower (around $1900 for the first rerun.)

And to answer the question of "why do you get paid at all?" that's because of residuals -- payment for the reuse of our content, when it's making money for the companies. My personal favorite explanation of residuals and why they exist is Craig Mazin's Magic Cake.

For the second part of your question: The residual (whatever dollar amount it is) is NOT multiplied by the "number of writers." There is usually only one, maybe two, credited writers per episode. There are credit rules about this; you can go to a max of three for an ep, but it's very unusual and they all split the resids.

The residuals don't increase by the number of people who are credited on the script. This is the same for features. The residual number is fixed, and you just split it between however many writers are CREDITED (which in features usually can't be more than three max, again, as per credit rules.) [And keep in mind that writing teams count as one "credited writer," so in features, it's not unusual for the residual pool to be split six ways. --ed.]

The idea that the WGA asked for "the same thing" for straight-to-web episodes is NOT correct. First of all, reuse of existing shows isn't "straight to web." That's streaming of something that's already been shown somewhere else first -- and what we're asking in the broadest terms is that we get a percentage (probably less than 2%) of whatever revenues the companies make when they rerun that content via streaming on the Internet.

We don't want a fixed flat number, like $20,000 (or for that matter, $1200 a year) per episode. What we asked for when this negotiation started, back in October, is a percentage, precisely because it's the only way to be sure we're being fair. If the companies get paid, they pay us, basically, somewhere around a penny and a half per dollar they make. That means that their costs NEVER outstrip their income; that problem only ever happens with flat fees.

We're sharing the risk -- if the companies are right, the income from ad revenues will be small, at least until the market "matures" -- but if it turns into a windfall, like DVD's did, then we will share in the upside as well.

What we are asking for with Internet-first (i.e. "straight to web") content is that we have jurisdiction over production so that we can get health, pension, resids and separated rights.

Internet-first means something like Ask a Ninja, that's not a rerun but an original created expressly for the Internet. (It can also mean "webisodes" that are made to go along with existing television shows but go straight-to-Internet, like webisodes for Lost or Battlestar Galactica.) "Jurisdiction" just means that the companies agree it's under signatory rules for health, pension, resids and separated rights. And if your resids are a percentage of your overall distributor's revenue (in other words, not a flat fee), then that number doesn't make it too expensive to produce that content. SAG already has a "Straight To Internet" framework that allows even the lowest budget work to be covered without making the costs so high it's unaffordable to make that content.

And just like the streaming, if we get jurisdiction on Internet-first, the only payouts that are going to be big for the companies will come in success -- if they have to share a piece of the merchandising/exploitation pie for a world or a character (say, Buffy Summers or the Buffyverse itself) then they'll only be doing it because the Internet-first content is successful and is being exploited "up-channel", i.e. being made into a movie or a tv show or something with a bigger revenue stream ALREADY. So again, companies only have to pay money out in success.

That's what we're asking -- or at least, it's what we were asking, when all this started. Since there's a press blackout, no one knows where things stand now. But all the conversation swirling around the $20K rerun vs. streaming has been confusing, and seemed worth at least trying to clear up.

Dana, the 2004 MBA is online at http://www.wga.org/subpage_writersresources.aspx?id=1610. It can't reliably estimate the average writer's "annual" income -- that depends on what kind of year you had (how many scripts you sold and/or how many weeks you worked on a staff) -- but the minimum payments for every kind of (contracted) work we do are set forth there.

dana - just keep in mind that a breakdown or annual incomes is only meaningful when compared to the incomes of their employers.

Writer, actors and directors create the products that are sold by the AMPTP companies. And yes, they are well paid for what they do.

But is that pay fair relative to the value of the products they create as shown by the revenues generated from them for their employers?

Professional baseball players are incredibly well-paid, and fair or not, it's because their industry generates billions of dollars in revenue. And if the players don't get a fair share, that money goes to their employers. Not to charity, not to make the world a better place, to their employers.

So this is about what is fair, not high and low. It's about what is a fair share of the revenue generated by artists products.

No one anywhere is arguing that artists should get more than their employers. The AMPTP companies take on all the risk, they should reep the biggest rewards.

But what is fair compensation for the use, and potential constant re-use and re-sale of the intellectual property these artist create?

This strike is about the vast difference of opinion between what writers feel is their worth, and what their employers do.

So don't get caught up in the raw numbers, whether you think they are high are low. Look at them in context with the revenues the work of the artists (and all labor) generates for the industyr.

What I really wonder is this. The amptp will at a certain point say this is our last and final offer. Do they meaning WGA NEG COM have to bring it back to their members and ask them to vote on it. Or do they have the power not to show them anything and keep this strike going.

Your blog and answer is exactly why I find this site so frustrating. Your response is completely inaccurate because you conveniently omit what TV writers are making on an episodic basis.

A script fee and residuals are ON TOP OF what the writer makes as their weekly or episodic rate. Funny how all of you here on UH omit the facts when it suits your argument.

The other comment that is a complete joke is when you say "we're all sharing the risk."

Oh really? Hmmm, lets see, do writers get paid for movies that never get made - yes. TV scripts that never get made - yes. Pilots that never make it to series - yes. Series that only make it for a couple of episodes - yes. Series that make it only 1 or 2 years which basically renders the series worthless to the studio because you can sell it into syndication or cable - yes.

If writers want their fair piece of the pie on the hits, then you should be willing to pay for the failures and return your script fees and salaries for the hundreds of failed shows and movies.

But that's not the case. Studios still pay writers, actors, directors and all the BTL people on failed shows.

So please, spare me the "we all share the risk" bs. Once you start wholly funding projects and not taking a dime on the ones that fail, your argument has merit.

I noticed you were an EP on "Birds of Prey". Did you give back your episodic fee on that huge turd that lasted 13 episodes??

And you were on this year's most hyped new show and biggest failure "Bionic Woman". How much of your over-inflated fee did you give back to the studio from that huge bomb?

None you say...hmmm...shocking. So tell me exactly what "risk" did you take on working on these two failed shows that cost the studios that produced them millions of dollars?

Once again, you want to share in the good times then you should share in the bad.

I don't understand why you write that taking a percentage of revenue means that "their costs NEVER outstrip their income; that problem only ever happens with flat fees." Let's run some rough numbers:

Everyone seems to think that all television will migrate to the internet at some point, right? So take a middling-performing show like, I don't know, 'Life' on NBC. Budget: probably about $2.5 million. Ad revenue for first run (adjusting for local adspace, etc.) about $2.9 million according to the AdAge data you can find on Nexis. So, broadcasting it, NBC makes about $ .4 million profit. (Not including any marketing or overhead costs.)

But say we're a few years down the line, 2011 or whatever. The WGA has gotten a deal it thinks is decent (hurrah). Let's use your number of 1.5% of revenue. And let's assume that by this point in time, there's a 1:1 replacement of broadcast ad dollars with online streaming ad dollars. (I actually think this equilibrium might not be achievable, but let's assume it is.)

So, 'Life' still costs $2.5 million. And generates $2.9 million in revenue during its streaming run. But 14.25% of that revenue goes to the Guilds (1.5% X 9.5 for pattern bargaining.) Which is $413,250. Which means the total costs, including residual payouts, $2.913 million. Total revenue $2.9 million.

Of course, a big hit show will have a bigger back end (though much less big without broadcast syndication.) But most shows aren't big hits. And more importantly, most WGA jobs are on non-big-hit shows, and it's important that those shows, the 'Life's of the world, continue to be financially feasible so that writers continue to be employed.

Seems to me that the only ways even a 1.5% cut of streaming revenue works are: 1) basic costs go down, so that even averagely expensive shows don't cost $2-3 million per episode. 2) The internet distribution brings disproportionately more audience ad dollars to the non-hits than the hits; or 3) streaming revenue surpasses (by a wide margin) current broadcast revenue.

I think 1) is unlikely unless some really cheap show becomes a massive hit. I think 2) is also unlikely-- look at TiVo. Everyone thought that when the numbers were revealed, TiVo ratings would help marginal shows, but with one or two exceptions, that hasn't been the case. 3) is the Gordian knot, and reasonable people can differ, but I think it's nuts to assume that online advertising will be that huge a bonanza, or even make up for the eyeballs that are currently fleeing broadcast. Because the online advertising world is just inherently really competitive. Look at the New York Times. It has a huge, robust web presence with millions of viewers and lots of ads. And it's been online for more than a decade- plenty of time to mature the business. But revenue is still down about 7% per year because its core business, newspapers, is getting decimated by the internet. Much like broadcast scripted television is getting decimated by the internet.

So, anyway, I don't see how only taking a cut of online revenue ensures that the companies will still have cost-exceeding revenue, when ad revenue is shifting from broadcast to online. And, this hits close to home for me as a new-ish Guild member employed in TV, because if this kind of deal makes middling shows untenable for networks, there goes hundreds of WGA jobs.

It is a puzzlement to me why people think it is nothing but simple justice for Stephen King to get a small taste (compared to the cover price!) every time someone buys one of his books. . . but some of those same people feel TV/movie writers are somehow being uppity to demand an even smaller per unit taste when their wares remain in demand and continue to be sold.

Actually, I was fired from Bionic Woman before they filmed the pilot -- and the script they filmed was rewritten quite a bit. The fees I would have gotten for the show going into production, I didn't get. I did what they called "settling out," though, which meant I didn't get 0.

Yeah, I didn't much care for Birds of Prey either. They fired me off that one too, although it was more the "you're not invited" thing than a contractual thing.

As for the weekly pay that tv writers get, you're right, there is a salary for being "on staff" -- although not all writers are on staff, some write freelance. If you *are* on staff, the weekly rate can be a lot or a little, depending on how much producing you're doing in addition to writing. The "big money" is generally considered to be in the producing fees, but they're not usually broken out in writing vs. producing when the deal gets made.

As for your assertion we're not sharing risk if we don't "give back" money when a show fails, or a movie doesn't get made -- since the final creative decisions usually end up resting in the hands of executives -- and trust me, I speak from experience when I say that when you say "no" to someone's boneheaded ideas, you often get fired -- it seems an odd choice to punish the writers for that. It's a struggle for every line, for every scene, every character, every casting choice. Should the actors be penalized if the show or movie does poorly?

The difficulty in the writing business, like many Hollywood jobs, is that the pay rate is good -- but you aren't always working. Some people will do very well. Some people will do terribly. Most people fall in the middle.

Ma's post was rather venomous and didn't need the personal insults to LK, however I would like someone to address the underlying points that were made (i.e. the reality or not of "shared risk"). I've yet to see this truly addressed and I think its a very relevant issue. Perhaps the studios don't feel a need to share all the wealth (via percentage vs fixed rate capped) because they feel that they are assuming all the risk yet the writers are there wanting a piece of the profit from the minority of product that is actually profitable. I'd like a level headed response to this please.

MA, Yours is a weak argument. First of all there are many layers of writers and different pay scales. Staff writers don't get paid for their scripts, only residuals.

Writers are signed and paid to be on the team or the network. To stay on the team we must produce a usable product. We don't own the team nor are most writers culpable for the direction in which the show goes. The show runner, one or two of the upper crust people on the show, determine the story lines and most aspects of the show.

If it fails it is not usually the individual writer who is responsible. It's the people who created the show, the network, the people in charge. It is their job, the basis of their existence, to determine what people want to watch and to put it on television. If they are wrong, too many times, they don't stick around. It's no different than any other business.

To have writers pay for a failing show would be the equivilent of baseball players giving back salary for a losing season. Aint gonna happen nor should it. Just don't resign those players or in this case those writers.

We earn our paychecks just like you and everyone else in the business. Our ability to remain among the ranks lucky enough to work on a consistent basis depends on our talents.

If a show doesn't make it, I think theres a lot more to it than bad writing. I think if you calmed down and thought about it you'd agree.

However, I think your answer was a bit weak, and here's why. Writers have made a very big point here and elsewhere about claiming that nothing could get made without a script, its the basis of all that follows, its all about the content and the talent that the writers bring, etc and so on. I'm sure you probably agree with that, but when faced with having to really share in the risk you say that the failures are because of studio interference and the writers shouldn't be held accountable for that.

You can't have it both ways, because if you use that argument then one could say that the reason a show or movie succeeds is because of the studio suggestions (interference). And if that's the case, then they have a much stronger argument to pay writers less.

By the way, I happened to enjoy Birds of Prey and was sad that it didn't last.

ma - you are pulling the same amptp mirror game we've been hearing for a while.

1) No one is disputing that this is on top of initial fees or weekly salaries, etc.. ALL of that is compensation for the right of the first release, first run and for other services like first-look, etc. Period. End. That's it.

2) Residuals are payments for the remaining value of the intellectual property when re-sold, or otherwise exploited beyond the first use. Is that sometimes zero? Yes.

3) Saying a writer should be shouldering some risk before they get paid anything is ridiculous. Here's why: Writers, except a very lucky few, are not invited in as investors. They are labor. They are a cost of production. Not in a film way, but in a "products produced" way.

You want to sell a DVD? Okay. You gotta pay the DVD makers first, right? Of course. You gotta pay for the packaging? Well, duh. You gotta pay for the thing that gives it market value? Like say, the movie or TV show on the disk? YES.

And the initial payment does not cover the right to duplicate and re-sell the product cost free.

Unlike people who make real property, like a disk or a jewel case, writers are only paid for every product actually re-sold. Not just every product that COULD be sold like producers of real property.

Every company that sells a product incurs an initial cost required to put the produce it and put it up for sale. Do they ask the makers of the DVD for a free window before they pay them? Will they be asking their video server clients to only get paid after they make a certain amount of profit? Um, no. That's laugable.

You pay to make the products, before you can re-sell them.

And the right to re-sell the intellectual property of a writer, director or actor comes with a small charge. Nothing like the initial fee, but a re-use fee based on the value the market assigns to it. It's "residual" value.

And another thing, if writers take the risk like you demand they do, then guess what? They are investors who get a say about how their intellectual property and their money is utilized.

Several screenwriting co-ops have recently formed to do this very thing. They reduced their upfront fees to have more say in the films. They used their success to leverage themselves in as investors. Which is different that what writers are on an MBA level.

I bet Laeta might have had a few strong suggestions about her budget, how it was spent, how her show was marketed, perhaps how it was cast and what time-slot it had.

She probably would have wanted a lot more say in the scripts, the notes she got, the changes that she had to make that perhaps she didn't like.

You know she doesn't have most of the those choices? Because the companies prefer to have that control. Why? Because yes, THEY TAKE THE RISK. They are supposed to. That's the nature of their business.

Laeta is not invited in to the process as an investor who will be a part of the companies decisions. Residuals are not "dividends". She doesn't get an annual report and there's no meeting for her where the company heads explain their decisions and sell them on the future.

She is a hired creative artist who is paid for her work, and then for the exploitation of her work.

And initial fees and residuals are how she is paid.

But if you insist believing residuals are unfair, then all of the minimum initial payments would go up astronomically because now the studios and networks must do a total buyout of the potential value of the script.

Now that's risky. And kind of dumb. I'm sure they'd rather spread out that risk over time. Residuals let them do that.

And if all the writers had some serious say as investors in how the companies spend their money, I bet they might say to cut the enourmous salaries of their CEOs before the companies give notice to some of their lower employees as a cost saving measure.

You think they want that advice?

Yeah, I doubt it.

Writers aren't investors. The AMPTP doesn't want them to be investors.

The problem here is that they also seem to be less interested in paying them the residual value of what they create when they re-sell it.

They want to re-sell the products without having to pay a fair price to make them.

[As always I want to note that I am not a member of the WGA nor of any entertainment union.]

The struggle over creative work! It's now every where and not just in your industry. But the industry that you guys and gals are in is leading the way. The crucial division in Hollywood is between the creators of intellectual property and the owners of that property and that is what is at the heart of this strike.

So I want to add something of a more general nature here that the original post only touches upon and the posts of Mazin and August referenced in the original does not do justice to.

Imagine a situation where a novelist writes a book and not only does the publisher profit from all subsequent publications of the book but the novelist does not get paid for subsequent republishing of the book, can't reuse the characters in the book himself, cannot write a sequel to the book, and if the book falls out of print can't try to republish the book somewhere else. This is what would happen if novels in this country were written for hire. (Some in fact are.) The boss would then own the novel and all of the copyright-able materials of that novel. This is something like the situation that holds in the movie and television industry.

Copyright is a state granted monopoly supposedly for a limited amount of time. But here is the problem: Who actually owns this so-called "intellectual property". In the case of the WGA writers the big corporations that hire them. This situation where fictional property (copyrights) is owned by fictional people (corporations) is the "hidden" fact behind all Hollywood struggles between creators of "product" and the "owners" of that product.

The fact that corporate entities own the copyrights to the work in the first place is a result of many power struggles in that last 200 years. A situation where a novelist writes a book and a publisher pays for it once, or not at all, and then from that point on only the publisher makes money from the work meant that all writers were either well-off or were sponsored by powerful men. In fact this was the situation that existed before copyright was regularized. English copyright began as a censorship program for the King.

But in the U.S. copyright was put into the constitution by lawyers and writers precisely to protect the individual writer by granting a monopoly on what that writer published for a limited amount of time. (It was, perhaps, the only kind of monopoly liberals believed in at the time.) We have a hard time imagining the "radicalness" of these copyright laws now, but in fact it was a way of turning upside down the usual situation where writing was licensed and writers were all sponsored by the big men. Of course printing press technology was at the base of this transformation from one form of intellectual production to another.

Corporations like the ones that you guys work for have been leading the way in gathering up and expanding the notion of intellectual property. If the AMPTP congloms are fighting so hard it is because they have 95 years worth of copyrights to share or lose every time somebody creates a show or movie for them.

I am just a poet and sometime technical writer. The problems I have confronted as a creator are often the same as the problems that the writers in the WGA face. And soon they will be the problems of all people in all industries. It is because the writers' unions did not have the power, the basic economic bargaining power, to win their own copyrights in the period from the 30s through the 60s that we are all in the position that we are in now.

Your fight is the fight of all people who ever do anything creative. Your fight is the fight of all unions.

rHob did say one thing that annoyed me greatly. I quote: "The very studios that have made sure to give you employment for the past 100 years." This is looking at things backwards. The studios don't give employment. They take employment from their workers. What they have is the basic investment. The jobs are our jobs they just rent them from us. With enough bargaining power we can gain some amount of creative control over our jobs.

Finally, I want to make a plea. There is no reason why various other members of the Hollywood industry should not partake in residuals in a direct way. The creators of sets, and designers of all types should also share in the creative profits.

Again, your response is filled with half-truths and is deceptive to the average person (or even the non-guild writer) who is reading these responses.

You say:

"As for the weekly pay that tv writers get, you're right, there is a salary for being "on staff" -- although not all writers are on staff, some write freelance. If you *are* on staff, the weekly rate can be a lot or a little, depending on how much producing you're doing in addition to writing. The "big money" is generally considered to be in the producing fees, but they're not usually broken out in writing vs. producing when the deal gets made."

You know and I know that 99% of the writers that write for tv are on staff. The WGA mandates that a couple scripts a year (usually 2 on a 22 episode order) are written by a freelance writer. Those two are usually given to a writers assitant or friend of the showrunner. The other 20 scripts are written by the staff.

And your assertion that weekly rates can be "a lot or a little" is deceptive and misleading as well.

Lets let the people judge if these rates are "a little":

A Staff writer (entry level writer)makes just over $3k a week. There is usually 1-2 staff writers on a typical staff.

A Story editor (2nd year writer)makes just shy of $6k a week. Pretty damn good for your second year on the job.

Now for those of you following along, multiply all of those rates by the number of episodes produced in a season (typically 22-24 for a full season, 13 for a half season).

And yes I know, here comes all the whining about "well not all of us are on staff" and "we're out of work for long periods of time".

Tough shit. This is the profession you chose and it's not steady employment. If you don't like it, go do something else.

The bottom line is that those working writers in the WGA despise this strike (and no I am not guessing, I know and work with many of them) because they will never recoup the lost income from this strike. But people like you, who can't seem to play well with others or just isn't talented enough to work steadily, will continue to bitch and moan about getting paid when you aren't working.

I know that the fanatics who run and post on this site will never get it, but I urge those of you who are reading posts and comments to do your own reseach on just how much money these people make in comparison to how much money is lost on their failed projects.

And maybe, just maybe I have convinced Laeta to stop posting half-truths and deceptive information...but I doubt it.

LT and Rocky are right. It isn't 100% the writer's fault if a show fails and it isn't 100% their doing if its a hit. It's a team effort. I have been on many projects that were derailed due to an exec who felt they had to say something even if it was too steer the ship into the iceberg. We would get notes that literally had everyone thinking the film or show was really a money laundering operation rather than an attempt to create something great. It's like having your legs kicked out from under you and still told you have to win the race. I've seen producers resumes that look like directions on how to kill a show.

We all need to remember that its a collaborative team effort. So no more talk of "it's all about us" or "without the script you'd be out of a job" or "without the crew the script would be called a book."

The book author analogy is also not relevant regarding copyright. Do I think you should have copyright-YES, the industry is just so far from that, that it is unattainable. Do I think that I (as a DP) should have copyright on my cinematography-YES--not going to happen even though some photographers do. I can make the same argument-nobody paints a frame for me and tells me to copy it. It is born form my minds eye, just like a script is born from the stories in your head.

Lets not try to reinvent the wheel here. Lets just get a good deal(not a perfect one) and get everyone back to what we really do. Make films or tv.

ma - you did more than question Laeta's assertion, you made an arguement against the struggle for a fair residual payment based on the idea that writers take no risk. hopefully you agree that argument is now, as you say, "full of shit."

And also, I don't understand how what the writers get paid on staff or not or whatever is relevant to this arguement.

Writers are well paid.

Agreed.

So what?

I believe the moguls are pretty well paid too.

So what?

Is the balance between what the companies receive in revenue fair compared to what writers are paid for creating the products that generate that revenue?

This is not a complicated concept. It's about fair wages. And "fair" doesn't mean just below what you think they deserve.

If you want to change how much money is in the industry, stop watching TV. Stop paying $10 to see a movie. Stop watching stuff online. Oh, and tell your 200 million friends.

I do feel that many writers make the mistake of making statements like "we want a fair share of the profits" or "most writers are middle class"...because that has nothing to do with any of this.

It wouldn't matter if every writer was a millionaire, if they are not paid the proper value of their work, that needs to be fixed.

And there shouldn't be a cap on certain wages because you are jealous of them or not, or if you feel writers are worthless hacks or not.

Seriously, shouldn't every football player just make like $100,000 a year and let the owners get all the leftover millions and millions and millions of dollars? After all, they take all the risk and $100,000 a year is a decent wage. They should shut up and be happy about it.

After all, the NFL has value because people pay to see the owners...uh...wait, they pay to see the players don't they?

"The bottom line is that those working writers in the WGA despise this strike (and no I am not guessing, I know and work with many of them) because they will never recoup the lost income from this strike."

Nice try, "Ma". Have you surveryed the majority of working writers? Or are you basing it on just you, Mazin and Ridley?

As one of those working writers you say despises the strike, I can only report what I've seen on the line and with people I've worked with and known for the past ten years---we do hate it, but we feel just in our cause and this fight.

But then again, your claim about "knowing and working with many" working writers is likely false anyway. Personally attacking Laeta while hiding behind a pseudonym tells me you're probably a liar--and definitely a coward.

The truth on the freelance thing is somewhere between LK and Ma. 2 out of 22 would be in the neighborhood of 10 % not 1% as Ma stated. As for freelance episodes going to friends of the showrunner (Having been one I've NEVER had any sort of success hooking up a friend for a freelance gig, I've always been given lists of studio/network exec's friends or people who they signed fat deals with that they're trying to get something tangible back on.) or writer's assistants (I thought this was one of the major reasons why typically over-qualified people took this gig, to possibly get an opportunity to work on staff, but perhaps Ma is against this tradition as well.) These folks are typically NOT working on a show, therefore the idea that these freelancers are "double dipping" somehow is not true. Either it's gratus under an existing deal or a new stream of revenue for someone outside the staff of the show. On basic cable I have seen almost half the episodes freelanced out. But, so as not to get bogged down in minutiae I will go to the main thrust of my post which is to agree with the people who use the pro sports analogy. Yes,Kobe gets paid a lot. Why? Because it's what the market will bear. Because he and those like him make the profits of the NBA and the Lakers possible. And I haven't heard yet of the NBA or any other organization that pays audience drawing talent, somehow pay so much to said talent that they forget to pay themselves and their shareholders and then go out of business. If they did so, well, I suppose that would be the business they chose and they would deserve their fate, huh?

From reading Michael above, you'd think the studios were losing their shirts on modest drama hits. What's the argument here? It only goes 2 years so they take a bath? That ain't the case if you look at the P&L statements. They make money on failures. They make money on many orders of 13. Real money.

Let's add something to Michael's hypothetical numbers. Let's add the advertising income from re-runs, which on cop and actions shows tends to be substantial. Then let's add the cable advertising income (often the same studio that made the show paying another division of the same studio that's showing it on cable, so they keep the whole pie). Then let's add the dollars American drama shows bring in from around the world. Michael, have you seen the foreign totals, say, for Life or 24 or Desperate Housewives or for that matter Bionic Woman? Many orders of 13, even if the series dies right there at 13, make back negative cost plus, say, an easy 50% over that, and this is after residuals to all involved are paid. And don't forget, that negative cost includes some fancy overhead numbers that pay for the studio's daily operating costs so the studio made money long before "break even" on paper.

If an episode of Life is 2.5 as Michael suggested, let's add nymbers. The domestic first-run network ad revenue plus cable 1st run ad revenue plus network re-run's ad revenue plus foreign per episode will, at a minimum, generate around 3.5 per episode and in many instances much more. Oh, and then there's the DVD. And then there's ad-supported streaming. And then there's the next round of cable sales after the contractual number of airings are done. CSI will be pumping up CBS profits for another decade.

Michael, the one-hour drama delivers truckloads of money. If they were such losers, would the studios be making them? Are they in business to lose money? Ask your lawyer or agent about those numbers and you'll stop feeling sorry for the studios and the networks, and you'll stop thinking the writers, actors, and directors are getting paid too much.

Well, in fact, networks *are* making fewer scripted shows every year, because fewer of them are profitable every year. Or at least that's the trend over the past 2-3 years. Of course the CSIs and the other shows you mention are, and will continue to be, very profitable, and as you point out, foreign sales do help. But (and I have talked to my agent and lawyer and other people about this), the threshold for breaking even on all that stuff is higher than I think you realize. I would, in fact, be pretty surprised if 'Life' doesn't lose money. And 'Life' is a relative success for a new show.(And remember, a lot of these marginal shows aren't even getting first reruns any more, since networks are getting more juice in those timeslots from first run reality. Which means that they can't amortize the license fee over two broadcasts, etc.)

But that's not even really the point I was making, because the thing is, all these ancillary markets may end up getting rolled into streaming (and EST).

And, so my point is: assuming basic costs stay about what they are, I think Laeta's assertion that (say) a 14.25% cut of streaming revenue for residuals guaranttes that "costs NEVER outstrip their income; that problem only ever happens with flat fees" is just flat out wrong. Especially if the current trend continues, of losses in prime time scripted eyeballs and revenues outpacing the gains in streaming eyeballs and revenues.

If one guy at the head of one company in an industry can take home $30 million, I'm not weeping for that industry. Sorry. There's no risk that Ben Iger is going to have to stand on line for government cheese anytime soon. The AMPTP's bottom line is doing just fine.

These head guys take home tens of millions; they take the big risk, they take home the big reward. Good for them. It doesn't mean they shouldn't have to pay for a product, be that intellectual or physical. The "risk and reward" thing the WGA is talking about is in regards to internet streaming of their product, and with a percentage - not of the total take, but only of the *profits* - the WGA takes the same risk of not getting paid that the AMPTP does. Seems pretty straightforward to me.

And here's the thing about the working staff writers who get paid so much - yeah, they do well. And they should. They've sacrificed, struggled, and worked hard to get there. Yay, them.

But understand, the actively working staff writers are the top 1% of the WGA. The rest are people with maybe one script produced this year, if they're lucky. That's $20k for an entire year, in California where the living ain't cheap, and that's IF they're LUCKY. The top 1% of writers who are on staff have given up their great jobs that they killed themselves to get so that the 99% of struggling writers can have health care, can get a check in a bad year when the product they wrote is providing Peter Chernin with a different Bentley for each day of the year. That impresses the hell out of me, personally. The day I see one of those AMPTP guys giving up everything they've worked for to make sure the guys *vying for their jobs* have enough to live on in the lean years, then I'll worry about the AMPTP's cost.

I'm a (book) writer, and I get paid every time my product is sold. I don't happen to think that's such an outrageous concept. I look forward to news of a fair deal for the WGA, because the sacrifice these people are making for their colleagues is really heroic.

MA: "The bottom line is that those working writers in the WGA despise this strike (and no I am not guessing, I know and work with many of them) because they will never recoup the lost income from this strike."

Unlike MA, I have the courage to post under my own name. My name is Patrick Meighan. I am a working writer in the WGA. I write for Family Guy. And I fully support the strike (whether or not I ever recoup my lost income from this strike) because the future of this Guild (and of all unions in the industry) depends upon writers receiving a fair fraction of the vast profits the corporations will be receiving by reusing our work on the internet.

The Guild members who came before me fought to win me a pension, health care, residuals, and decent minimums. That took courage and determination, and a willingness to ignore anonymous shills like MA. I, a working writer in the WGA, owe it to future generations of writers to show the same courage and determination today. Which is why I, a working writer in the WGA, support this strike with all my heart.

As for Peter Chernin being paid too much, well, he's paid a lot more than the average executive for the same reason, say, Joss Whedon gets paid a lot more than the average TV writer-- he's had the good fortune to demonstrate that his skills and talents have value in the marketplace. Maybe he's not worth the money. But maybe [insert name of your least favorite writer here] isn't worth their giant quote because their last movie tanked, etc.

I have moral compunctions about executive over-pay in general in US corporations, but if you're going to make a moral case about it, it's a moral case for paying more money to the very lowest rungs-- janitors, kitchen workers-- not the middle-ish rungs like writers.

(and also none of these big corporations would have much of a stable, long-term profit margin at all if all they did was produce and distribute WGA-covered content. The stable profits, which is what generate the kind of growth which theoretically makes Chernin worth so much come from other divisions, usually. And, in Fox's case, American Idol, which may well have prevented the network division from folding.)

I don’t know if this blog wants this kind of debate in this much detail, but Michael’s response about studios and networks not making money on scripted series is based on seriously questionable arithmetic. It also ignores recent history and the reality of the modern conglomerate. Let’s leave comments about morality and fairness and executive salaries aside. Let’s just talk about numbers.

Laeta’s assertion that the studios can afford to pay out that 14+ percent and still make money is accurate for one reason. Streaming won’t mean less revenue. In fact, it will mean more. I don’t like thinking this way, but I have to wonder who Michael works for. He sounds way too smart to say the things he's saying. The one-hour drama, written by writers under WGA jurisdiction, is a more stable source of studio income than movies. Any executive willing to tell you the truth will tell you that ROI (return on investment) in TV is better than in movies. They have bad movie years and good movie years. TV makes money year in, year out.

The networks, Michael says, make fewer scripted shows every year because they’re not profitable. Let’s talk about “fewer.” We can all count without making mistakes. As for “profitable,” that’s harder. But not impenetrable.

First of all, networks aren’t networks. They’re vertically integrated conglomerates (studio, network, cable network, internet content owner and distributor all rolled in one) that make and own a majority of their own shows. When the FCC repealed the fin-syn rules in 1995 after strong lobbying by the networks, the result was the modern communications conglomerate. Once the networks owned their own shows, they got a license to print money. This is why studios bought networks. Also why creators of shows get a much smaller piece of the pie than they did ten or fifteen years ago before vertical integration. The “studio-network-distributor” keeps more because fewer employers means less negotiating room for the creator -- and every other writer, for that matter. Vertical integration, by the way, was common in the movie business before television existed. It was outlawed by the Paramount consent decree in 1940, back when the Justice Department enforced the anti-trust laws. The five studios were prohibited from owning the distribution networks (theaters) for their own movies. What we have in television now is the reverse of that.

Second, it’s true “networks” make fewer comedies right now, but that’s because they can’t pick a hit comedy for love nor money. If they’d leave the creators alone maybe they’d get another gold mine like Seinfeld or Frasier. (Those shows produced billions domestically. Foreign revenue on comedies often sucks.)

Third, the “networks” may be losing eyeballs, but that’s only if you think of networks as meaning CBS, ABC, NBC, and Fox. This takes us to “fewer scripted shows” and “profitable.”

Fewer shows? That’s just flat-out wrong. Really, Michael, most of us can’t read a profit-and-loss statement, but we can all add. Make a list of TV one-hour dramas being produced right now. Then count the number five years ago and then ten years ago. There are many more dramas today because every time one disappears from a “network” to make room for American Gladiator, two more pop up on other “networks,” those things we learned to call “basic cable” and “pay cable.” We talk about Monk and The Closer and Nip/Tuck and the Sopranos as being on “cable” instead of “network.” But the networks where you find those shows (TNT, HBO, Showtime, USA) are owned by the same companies that own ABC, NBC, CBS, and Fox. So this very idea of a “broadcast network” is outmoded. We get “broadcast” over our “cable.” We get “cable networks” over our cable. We’ll soon get “broadcast” shows and “cable” shows over the “net.” It’s all one chain.

What do we get on that big distribution chain with all those “networks,” as we call them. One thing we get is tons of one-hour. Why? They’re hugely profitable. Michael, you suggest that “Life” will lose money for its studio. Yes, on the studio books, it will lose money. This means there will be no profits to share with the creator. But that studio is also the network. If you add up all the income the show brings in, the parent company, NBC-Universal, will show a tidy little profit. Little, maybe, but a profit. I once saw a P&L on an expensive 13-episode drama. The studio made money. (Yes, some dramas don’t re-run well. But others do extremely well. Many of the ones that don’t re-run well are making a bundle in DVD. Go to any big video store and ask them how much they sell of 24 and Lost. Ask the studios, too. Good luck getting an answer. They don't have time to give you one because they're too busy going bankrupt.)

A big hit on one of the Big Four, by the way, produces profits so large the mind boggles. Take any drama show in the top 20. Add its initial ad revenue to its foreign and first-year cable revenues, then subtract its costs. You get in the case of many shows 300 to 500 million.

From one show. Three hundred million in profits the first time around. And remember, each episode has many more money-generating years to go. And we’re supposed to worry about these companies going broke paying writers and actors and directors an extra couple of cents on the dollar.

A hit comedy? Malcolm in the Middle? Hundreds upon hundreds upon hundreds of millions of dollars. The creator, by the way, never got anything near what the creators of Frasier or Friends got. Those shows happened before vertical integration.

For a final example, let’s ask why anyone pays production costs on a show like Golden Globe-nominated Mad Men and why “the AMC network” pays a license fee. Does this show draw ten million eyeballs? Nowhere near. (But the eyeballs it does get are very affluent ones highly prized by advertisers.) With a small audience, on a “cable network” hardly anyone had ever heard of, could this show be profitable? I haven’t seen the balance sheet but I know one thing. The network showing it and the studio making it aren’t in the charity business or the money-losing business. They aren’t Habitat for Humanity. They’re businesses. They don’t have an overwhelming urge to pay cameramen and writers and grips and actors every week because it’s good for the local economy.

They make money or they wouldn’t make the shows. They will make more when they have a new distribution system with ad revenue. It’s a distribution system that will be very profitable because you can count every eyeball with certainty. Advertisers love that part. That new distribution method is called “the net.” The conglomerates are going to clean up like bandits from the ad revenue.

That’s why they don’t want a percentage going to actors, directors, and writers. Because the pot is so huge that the accountants would be gagging at the sums paid out to the little people.

Robert: First, though I disagree with a lot of what you write, thanks for the response. Except for the suggestion that I must be a shill because I sound "way too smart" to part with the WGA party line. But I'm going to chalk that comment up to the general corrosiveness of the atmosphere on these blogs.

But my basic response to you is 1) I disagree about the numbers and 2) you're right to bring up cable, which I was going to get into in my last post but I felt like I was going on too long. There's a lot of growth in cable for scripted stuff, but even that growth is less rosy than you realize, I think.

So, on 1) I think we're going to have to agree to disagree. I've seen P&L statements too for failed network shows shows, and they ain't that hot. I'm sure some 13-episode canceled shows do manage to recoup, but a lot don't. Even with vertical integration, etc.

And the thing about internet distribution is that it mostly seems to be cannibalizing from broadcast audiences, and except for EST, at a much less-monetizable rate. Whether this changes in a few years is a huge issue, but remember right now, Hulu has found that it can't put pre-roll ads on its streams or else people don't watch. In fact, people don't seem to be watching past the first commercial break in the Hulu beta anyway, because apparently (and I find this baffling, but go figure) it's just too jarring to watch a streaming commercial without being able to flip channels. So I'm not optimistic that you'll be able to make enough money on streaming video to supplant the lost eyeballs on broadcast.

Not to mention, piracy. Hulu was hacked about five days into the beta- someone figured out how to capture the video and excise the commercial breaks. And these de-commercialed hulu streams are now all over bittorrent. I sometimes hear things about how streaming video is Tivo-proof and it's not just true.

2) Now, cable. Yes, long live cable. USA Networks in particular has made a ton of money off of modestly budgeted scripted programming, and that's fantastic news. But as everyone points out, those jobs pay a lot less (my agent tells me around 30% less than a commensurate staff position on network) and have much lower residuals-- and frankly, that's one of the reasons there's been such a proliferation of shows.

So maybe, WGA network show jobs will continue to be replaced with lower-paying (and shorter episode order and lower-residual-yielding) cable jobs. Which, you know, is okay. But I'd still rather not exacerbate the problems in the scripted network world via an excessive flat-rate revenue residual draw.

Honestly, if I were drawing up a residual scheme, I would make it kind of like income taxes. Low-rated shows pay a smaller percentage of their smaller revenues, higher-rated shows a higher percentage. I'm not going to pretend that CSI or whatever couldn't afford 1.5% or 2.5%. But I don't think, say, Friday Night Lights can.

And if you wanted to get *really* jiggy with it, the WGA could then pool all the residuals on a quarterly basis and distribute it to writers who wrote a residual-qualifying episode. So the writer who gets (for instance) .5% streaming residual on her Friday Night Lights epsiode also gets some of the 2.5% (or whatever) from the CSI streaming residual pool.

Though I'm not actually sure it's legal for a union to redistribute like that, and also I'm not sure the membership would ratify it. But in pure business terms, I think it's a fair and workable solution.

If the writers (and everyone who deserves a residual on their hard work that makes others rich - which is everyone who works on the production) get a percentage of the PROFIT, it is literally impossible for it not to be affordable.

Oh really? Hmmm, lets see, do writers get paid for movies that never get made - yes. TV scripts that never get made - yes. Pilots that never make it to series - yes. Series that only make it for a couple of episodes - yes. Series that make it only 1 or 2 years which basically renders the series worthless to the studio because you can sell it into syndication or cable - yes.

If writers want their fair piece of the pie on the hits, then you should be willing to pay for the failures and return your script fees and salaries for the hundreds of failed shows and movies.

*******************Ma -- Are you a studio exec? Sounds like you don't want to reveal your dirty little factoid. Did Laeta have to take your retarded note and execute it?

Sheesh. Executives who shift the blame onto the writer for their sorry ass desperate development notes trying save their middling careers on a project they barely have the courtesy to pay attention to. Blaming a real writer for a lame ass note that goes against or completely destroys a premise, thus creating the very failure you're asking the writers to pay the studio back for. Thinking a "tits and ass" note is the bomb and will be the magic pill to save said show. Hey Ma, were you that executive who always complains about so and so's hair and makeup? And wants your female star to run and jump more?

Take responsibility for your own failures. All the talent has to do is wait two years for the next rotation of hungry MBAs who are desperate shadow artists wanting to naysay and destroy some pretty promising material.

There are people posting on this site that claim it's possible to lose money from giving the writers a percentage of the profits, which is of course impossible. Yes, others are attacking the flat fee (as they should - it's both insulting to writers and a ridiculous business model if it does eliminate profits).

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